RENO, Nev. — Federal land managers agreed Thursday to spend the next two years studying a proposal by the wife of oil tycoon T. Boone Pickens to establish an eco-sanctuary for nearly 1,000 wild horses across more than 900 square miles of Nevada.

The Bureau of Land Management will conduct a formal environmental assessment of proposal offered by Madeleine Pickens and her non-profit group, Saving America's Mustangs, as a way to minimize the need to round up excess animals on the public range, BLM Director Bob Abbey said.

The agency also will analyze potential economic and social effects of the reserve that would stretch across more than 580,000 acres of mostly public and some private property Pickens recently bought south of U.S. Interstate 80 between Wells and the Utah line.

Under the proposal, Saving America's Mustangs would improve and maintain fencing and water wells and oversee management of the eco-sanctuary horses, which would remain under federal ownership.

Saving America's Mustangs (SAM) also would provide Western history, wild horse-related education and promote ecotourism at the site to be known as "Mustang Monument" about 70 miles southeast of Elko.

"We look forward to the day when you can come to Mustang Monument and behold the wonders of that beautiful piece of heaven in northern Nevada, and the magnificent wild horses that will spend their lives there," Pickens said in a statement to supporters on the group's Web site on Thursday.

Abbey said the BLM-managed public lands that would be part of the proposed eco-sanctuary — 530,000 acres known as the Spruce grazing allotment — would continue to be publicly accessible for a variety of outdoor activities, including big game hunting. He said the proposal may provide a way to help the BLM reduce the size of overpopulated herds while ensuring healthy rangeland conditions.

"The selection of SAM's proposal for environmental analysis furthers our overall effort to improve management and control costs of the Wild Horse and Burro Program," Abbey said. He noted that the BLM is preparing to publish a new wild horse and burro management strategy in the coming weeks.

The strategy, among other things, calls for the establishment of eco-sanctuary partnerships.

Pickens last year purchased the 14,000-acre Spruce Ranch and adjoining 4,000-acre Warm Creek Ranch to serve as the home base for the sanctuary intended to help keep mustangs on the range instead of in government-funded holding facilities.

SAM holds the 530,000-acre allotment's livestock grazing privileges, which it would relinquish to the BLM for intended use by wild horses.

Some Elko County ranchers have opposed the plan for fear it will lead to reductions in livestock grazing in the area. Pickens argues the sanctuary will benefit not only the horses but the local economy.

"Nothing of this magnitude is ever accomplished without a difference of opinion and our ability to persevere and work together is essential to the success of this project," Pickens said.

"SAM stands ready to take on these challenges and work diligently with the BLM to finalize our agreement so that we can actually take the first group of 900 horses from the pens they stand in to once again enjoy the freedom of the open spaces of Nevada," she said. "We ... sincerely hope that our efforts there will produce new economic opportunities for Elko County and a place we can all be proud of."

Some 33,700 wild horses roam freely in 10 Western states, about half in Nevada. The BLM set a target level of 26,600 horses and burros in the wild, and removed 10,637 of the animals from the range in the fiscal year ending Sept. 30.

More than 40,000 horses are in government-funded holding facilities. Of the $63.9 million designated for the BLM's wild horse and burro program in the last fiscal year, holding costs totaled about $37 million.

Abbey said SAM was the only party that submitted a potentially viable proposal to the BLM in response to the agency's request for applications on March 25, 2011.

If a partnership agreement with SAM is finalized, the BLM said it would sponsor the eco-sanctuary with funding sufficient to cover the cost of managing the horses — an expense that is anticipated to be less than the BLM's existing cost for holding horses in long-term pastures in the Midwest.

The potential partnership agreement envisions a fundraising role by SAM to cover educational and tourist-related costs, BLM said.